Nepotism alleged in awarding of Michigan education contract

On behalf of Sheehan & Associates, P.L.C. posted in Contract Disputes on Friday, November 29, 2013.

A lucrative Michigan contract is up for grabs, and the connection of the head of one of the companies bidding for it to the governor's budget director is causing somewhat of a political firestorm that has state Republicans and Democrats at odds.

The $5 million contract is for a pilot project to improve technology in Michigan's classrooms. Six companies are bidding for the contract, which will be awarded by the Department of Education. One of them is iSchool Campus LLC, which is headed by the brother of John Nixon, Michigan's budget director.

Part of the concern by Democratic lawmakers is that the school technology company, based in Utah, lobbied the state legislature to provide funding for the pilot project. Another source of debate is the conflict of interest of having the budget director's brother bidding on such a lucrative state contract.

Nixon insists that he not only disclosed the potential conflict to lawmakers on the appropriations committee, but told his brother that, although he was welcome to bid, he could not help him get the contract. He said that the proposals submitted by his brother's company have been directed to the Department of Education, and that his staff has no involvement in determining who will receive the contract.

According to an iSchool Campus spokesman, Nixon's brother was never part of the lobbying effort in Michigan. The company does lobby state legislatures around the country to get their classroom technology into school systems, but the firm claims that it has been particularly careful in Michigan to avoid any direct involvement by its chief executive officer and chairman.

It is anticipated that the program, which is covered under the 2014 budget, will be awarded before the end of the year. If it is awarded to iSchool, there will no doubt be accusations of nepotism, whether it occurred or not. The connection of the company to the administration may, on the other hand, work to its disadvantage. No doubt the state's legal advisors, as well as iSchool's, are working to ensure that there will be no cause for legal dispute if the contract does indeed go to that company. Political disputes, however, are probably unavoidable.

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